January 25, 2013

Wall Street Raped Main Street

Let us hope the President's appointment of a federal prosecutor, Mary Jo White, to run the Securities and Exchange Commission signals a significant change from the past. Over his first four years as president the culpability of wall street and large banks was barely given lip service. This is the black spot on Obama's tenor. He caved in to large contributors. Unfortunately, what the S.E.C. will do has little positive direct impact for the homeowner who was bludgeoned.

Any victories that Ms. White may have will accrue to the U.S. Treasury in the form of fines levied against these culprits with little going back to those who were hurt, the homeowner. The banks and wall street look at these fines as the cost of doing business and probably have budgeted for them. No one will end up in prison; however, during the same time period some poor person will be convicted of stealing $10 in order to feed his family.

The reason we are in a near depression is banks and Wall Street knowingly concocted, and sold sub-prime loans, and made substantial profits doing so. These same assets could have caused many of these financial institutions to fail except for the government bailing them out.

While the banks were bailed out little was done to help the homeowner. The banks made substantial progress in getting on a healthy footing since the bailout. Now, per an article in the New York Times, http://nyti.ms/OY2Of1 , it is expected that the banks will receive a large boost in profits due to an expected refinance boom brought about by a new round of quantitative easing by the Federal Reserve .

This expected "gift" to banks should be used to pay retribution to the homeowners that were brutalized during the last decade by the very same Wall Street and banking industries. The recovery of net worth of the consumer is paramount to the recovery of the economy.